Parliament Updates

Zali Steggall MP speaks on Paid Parental Leave

31 August, 2021


I welcome the opportunity to speak on the Paid Parental Leave Amendment (COVID-19 Work Test) Bill 2021. This bill makes necessary amendments to the paid parental leave work test arrangements to ensure that those who have lost work as a result of the government imposed lockdowns are not disqualified from receiving government paid parental leave and the dad and partner pay package.

Currently parents need to have worked at least 330 hours, approximately one day per week, for 10 of the preceding 13 months to be eligible for paid parental leave. They also can't have more than a 12-week gap between each workday in a 10-month period. In the current situation of lockdowns, up to 14,000 families would be prevented from receiving paid parental leave without this amendment passing. This bill amends the work test to include people who are receiving the COVID disaster payments, regardless of the rate they are receiving. Business owners who are receiving state based business support grants such as the New South Wales COVID grants for small and medium enterprises will also qualify, provided they can demonstrate some worklike activity. This could include, among other things, a musician rehearsing for performances or writing a new song.

I support this bill and I understand the urgency with which it needs to pass. New South Wales has now been in lockdown for over two months, and this parliament won't sit again for another six weeks. If this bill were not to pass, up to 14,000 families, through no fault of their own, would be disqualified from receiving paid parental leave. Participating remotely, I'm acutely aware of the lockdown situation in New South Wales and in Sydney. We have now been in lockdown for over two months and it's clear that this is desperately needed. This being the second lockdown on the northern beaches, what's interesting is that the Northern Beaches Hospital, which services the electorate of Warringah, is actually reporting a baby boom. This is occurring across the country, but particularly in our region, probably because we also had a lockdown some nine months ago at Christmas time. It is important for families that this bill passes and that new parents have access to leave payments despite the lockdown.

We also need to talk about the broader reform needed to the Paid Parental Leave scheme. We've got gross inequalities throughout our system that need to be fixed. The system embeds gender stereotypes and discourages women from taking on higher-paid jobs. The Grattan Institute has conducted research that shows that, by the time she retires, the average 25-year-old woman who goes on to have a child can expect to have earned $2 million less over the course of her working life than the average 25-year-old man who becomes a father. Contrast that to a childless woman and man, for whom the gap will be about $300,000. Not that that's a good thing, but it is dramatically different.

Despite desperately needed changes to improve flexibility of the scheme going through last year, it's quite outrageous that the Services Australia website still states that our Paid Parental Leave scheme of 18 weeks paid leave at the minimum wage is available to the 'birth mother'—that's how the website labels it—the 'initial primary carer of an adopted child' or 'another person caring for a child under exceptional circumstances'. Secondary carer's leave is called—again, this is incredibly discriminatory—'dad and partner pay', and is just two weeks at minimum wage. This gendered language needs to be updated urgently to reflect that we're living in 2021 and to align the language on the Services Australia website to the kind of flexibility measures that were actually introduced by the government last year. I urge the government to note this and urgently amend their website.

The language and the discrepancy means that, in Australia, 99.5 per cent of paid parental leave is taken up by women. It reinforces the stereotype of women taking on greater caring responsibilities and unpaid work around the home. The income test applied to both leave arrangements further reinforces the gender pay disparity. Each form of leave is individually income tested. If the mother of the child earns more than $150,000 per year, she is ineligible for the leave, regardless of the income of the father. So a family where the mother earns $152,000, for example, but the father earns less than $150,000 is ineligible for paid parental leave. But, conversely, in a family where the father is the primary earner, he can earn millions of dollars per year while the mother, who may work a day a week, can still claim the full paid parental leave entitlement. This is ridiculous. The gendered division of labour reinforced by our paid parental arrangements is holding Australian parents back. Australia has high rates of part-time work by women compared to other similar nations. In Australia 37 per cent of women work less than 30 hours per week. That is the fourth-highest percentage in the OECD. Improvements in women's workforce participation and economic security can only be sustained if there is more equal sharing of unpaid care. We must improve this system.

The Grattan Institute, the Parenthood group, Parents at Work, UNICEF and Karitane all support the view that more gender-equal paid leave promotes more equal sharing of paid work and care and that parental leave design is one of the most important policy levers impacting the sharing of paid and unpaid work. It could also benefit families and children to have more full engagement with both parents. Australia has one of the least adequate paid parental leave schemes of the OECD. The average length of paid parental leave among OECD countries is 55 weeks, while Australia has 18 weeks. Paid parental leave in Australia is granted to one parent, the primary caregiver, whereas in other OECD countries it can be shared. More equitable paid parental leave schemes are important. They will encourage fathers into caring roles, improving their long-term bonds with children, participation in unpaid work in households and appreciation of the work involved in raising a child, and they will provide primary carers with the opportunity to return to their careers sooner and more sustainably. There are a number of options on the table, and I urge the government to address this issue. So I welcome the bill and support the need for a temporary alteration of the work test, but broader reform of our scheme is definitely needed.